PBD-2013-03 Approved procurement arrangements from 1 July 2013 (revised as at 1 October 2014)

Description:

This Direction deals with the procurement of goods and services by a government agency within the meaning of the Public Works and Procurement Act 1912 (the Act) except as noted, this Direction applies to the procurement of all goods and services by a government agency (Note 1). It does not apply to the procurement of construction or infrastructure (e.g. railway rolling stock).

Function

Procurement

Subject

Procurement approved by Cabinet and ERC

Where the procurement of goods and services by a government agency has been considered and approved by Cabinet or the Cabinet Standing Committee on Expenditure Review (ERC), this Board Direction does not apply to the extent of any inconsistency with the decision of Cabinet or ERC. This includes where Cabinet or ERC approves the procurement of goods or services to implement its decision.

In undertaking the procurement approved by Cabinet or the ERC, the agency head is to have regard to the Procurement Policy Framework, when conducting the procurement (for example, when selecting the method of procurement).

Procurement valued up to $5,000

Any government agency may enter into an arrangement with any supplier for the procurement of goods and services valued up to $5,000 even if the goods or services are available on whole of government contracts.

Agencies seeking accreditation

A government agency that has, by 1 July 2013, formally applied to be accredited under the NSW Procurement Board’s Agency Accreditation Scheme for Goods and Services Procurement (Note 2) may enter into an arrangement with a supplier for the procurement of goods and services using the following methods:

Procurements over $5,000 and up to $30,000: An agency seeking accreditation can procure goods and services valued over $5,000 and up to $30,000, which are not available on whole of government contracts, subject to seeking at least one written quotation.

Procurements over $30,000 and up to $250,000: An agency seeking accreditation can procure goods and services valued over $30,000 and up to $250,000, which are not available on whole of government contracts, subject to seeking at least three written quotations.

Procurements over $250,000 and up to $1 million: An agency seeking accreditation can procure goods and services valued over $250,000 and up to $1 million, which are not available on whole of government contracts, subject to conducting a tender.

Low risk procurements over $1 million: An agency seeking accreditation may conduct a procurement of goods and services valued over $1 million, which are not available on whole of government contracts and which are assessed by the agency head (or delegate) as being low risk, subject to conducting a competitive procurement process endorsed by an accredited agency within the cluster, the Department of Finance, Services and Innovation (DFSI) or an independent person determined and appointed by the agency head (or delegate) as being appropriate to the nature of the procurement.

High risk procurements over $1 million: An agency seeking accreditation may conduct a procurement of goods and services valued over $1 million, which are not available on whole of government contracts and which are assessed by the agency head (or delegate) as being high risk, subject to submitting full details of the proposed competitive procurement process to DFSI for approval.

Note: Consistent with withdrawn Board Direction 2012-04 (withdrawn from 1 July 2013), the procurement of goods and services by an agency seeking accreditation pursuant to the agency’s specific statutory powers of procurement is exempted from this direction until the agency is accredited by the NSW Procurement Board.

Unaccredited agencies

A government agency that has not applied to be accredited under the NSW Procurement Board’s Agency Accreditation Scheme for Goods and Services Procurement may enter into an arrangement with a supplier for the procurement of goods and services using the following methods:

Procurements over $5,000 and up to $30,000: An unaccredited agency may procure goods and services valued over $5,000 and up to $30,000, which are not available on whole of government contracts, subject to seeking at least one written quotation (Note 3).

Procurements over $30,000 and up to $1,000,000: An unaccredited agency may procure goods and services valued over $30,000 and up to $1 million, which are not available on whole of government contracts through a competitive procurement process, which may be achieved through:

at least three written quotations from any arrangement implemented by another agency which permits piggybacking, or

where concurrency has been obtained from an accredited agency within the agency’s cluster or from DFSI.

Low risk procurements over $1 million: An unaccredited agency may conduct a procurement of goods and services valued over $1 million, which are not available on whole of government contracts and which are assessed by the agency head (or delegate) as being low risk, subject to conducting a competitive procurement process endorsed by an accredited agency within the cluster, DFSI, or an independent person determined and appointed by the agency head (or delegate) as being appropriate to the nature of the procurement.

High risk procurements over $1 million: An unaccredited agency may conduct a procurement of goods and services valued over $1 million, which are not available on whole of government contracts and which are assessed by the agency head (or delegate) as being high risk, subject to submitting full details of the proposed competitive procurement process to DFSI for approval.

Assessment of low risk and high risk procurements over $1 million

In assessing whether a procurement is low or high risk, the agency head (or delegate) of an agency seeking accreditation or an unaccredited agency needs to consider factors relating to the procurement, including:

nature of the goods or services being procured

whether the goods or services being procured are also purchased by other agencies within the cluster

the agency’s experience in procuring goods or services of this nature

the agency’s experience in conducting competitive procurement processes of the type planned

capability of the market to respond to any specific requirements of the procurement

other circumstances considered by the agency head to be unique.

In assessing the monetary value of any procurement, it is the estimated value over the proposed term of the acquisition and not a value per annum.

Direction 2013-03 applies from 1 July 2013 until it is revoked.

Notes

(1) This includes goods and services procured by a government agency to pursuant to its specific statutory powers of procurement as described in section 136(1)(b) of the Act (otherwise known as its ‘statutory procurement’ functions).

(2) Agencies in this category are the: Planning and Infrastructure, Premier and Cabinet, NSW Trains and NSW State Emergency Service.

(3) Note that Board Direction 2012-02 also permits a government agency located in a non-metropolitan area to purchase goods and services valued up to $5,000 (including GST), from local sources, despite those goods and services being available on whole of government contracts, provided that the supplier’s rates for the goods or services are reasonable and consistent with normal market rates.